Monday, 21 May 2018

Sonia Sadha
does a brilliant job of getting her argument about pensions and risk entirely
the wrong way round. She tells
us that:

"We need to ask hard questions about
why young people are being expected to bear increasing amounts of individual
risk. The obvious example is pensions. Gone are the days when companies pledged
to pay retired workers a guaranteed income for the rest of their lives; today’s
workers must, instead, save into an individual pot that must last."

I'm sure the
irony will be lost on most people associated with The Guardian - but this, of
course, from a paper whose columnists continually bleat on about the plight of falling
wages. To understand why this article is misjudged, you need to understand why
falling wages are not the bogie that most think they are.

But before we
get to that, it's a shame Sonia Sadha doesn't seem to grasp that pensions are
not separate from the price of labour - they are deferred labour costs bundled
into the same overall package as pay. Whether the pay/pension costs to the firm
are at a ratio of 90/10, 80/20 or 70/30, they are still total costs that a
business must factor into its overall balance sheet.

In an age
where firms are forced to pay a minimum wage, which puts the value of labour
out of whack with the price of labour, and then consequently only serves to
increase both unemployment and consumer prices* - and in an age where people
are living longer and longer, making pensions prohibitively expensive - the
reality is, more and more employees are not worth the combined costs to their
employer of their pay and a lengthy pension payment plan.

Because your
pension is deferred pay, the only way for many employers to keep up the kind of
pension commitments that were prominent when we didn't live so long would be to
increase the pension to pay ratio, which would mean cutting pay to increase
pension duration. And that's a policy you will never see a Guardian columnist
endorse. What Sonia Sadha sees as the ignominy of apparently "forcing
individuals to bear more risk" is really just a simple case of arithmetic.

Why falling wages are a good thing

Now, about
falling wages: falling wages are, in net terms, a good thing for an economy
overall. Obviously they are bad for the people whose wages have fallen - but
falling wages are a transfer from workers to employers (and indirectly, to
consumers) - there is no net negative externality, it is merely a
distributional effect.

But there are several additional positive elements to lower wages. People tend to confuse economic growth
and job creation, but most of the real benefits of economic progress come from
saving labour, not increasing its cost. Lower wages means it costs less to
produce something, which is a similar benefit to finding a new efficiency or a
new technological innovation.

On top of technology
improving living standards, and consumers having goods and services more
cheaply, there is a third positive to falling wages in places like the UK and USA:
such as boosts for our domestic economy (not to mention poorer people in the
developing world having more money when home grown inefficiencies are
outsourced). This is to do with the ratio of total labour costs to real output,
and how the decreasing wage you need to pay employees to produce one unit of
output increases the likelihood of keeping it in this country - another thing
The Guardian writers have always claimed to like.

* This is basic Econ 101 that politicians
love to ignore. The supply and demand curves of labour are factors that mustn't
be overlooked, because employment and wages are always in a trade off tension.
Price floors like a state-imposed minimum wage artificially hold wages higher
than their marginal value, which means when economic supply and demand forces
are trying to push wages down, something has got to give with a minimum wage
law, and it's usually unemployment and increased prices for consumers.

Sunday, 20 May 2018

I know, I know - I've been quiet
recently in blogosphere: a few big things have shaken up my life recently - moving
house, my father's dementia, and the death of a much loved friend being the three
biggest things. Under these conditions, writing has had to take a back
seat. For anyone interested in what I'm chipping away at, blogging is only a
tiny part of the list of projects I have on the go, and these are the biggest
projects - what I like to call bestsellers that nobody has yet read!

An epistolary of wisdom
and general philosophies for life

A book about God, maths
and the universe

A book on morality

A book about love

A comprehensive book on
economics

A book about Christianity
called The Genius of the Invisible God

A book about Christianity
called The Economics of being a Christian

A book called Marvin The
Supercomputer, based on a massive thought experiment

A book on psychology and
human behaviour

A book on fundamentalism
,cults and other dangerous in-group tribalisms

A couple (maybe three) of books
of essays comprising the material that doesn't belong in any of the above

I also want to write a few
plays, and I have what I think is a good idea for a TV drama screenplay too - a
drama about different types of genius.

The danger is, life is so
short that you really need to make these projects come to pass - make them
happen!! - and this is where you need a rigorous 'To do' list structure and
self-discipline in not getting sidetracked.

As I only write
non-fiction, I am not going to be very edifying on the literary mechanics that
operate within the author's creative engine (for that you can go to my best
friend, author and creative writing lecturer Ian Nettleton).

I'm also not going to be
much of a mentor to anyone on the art of self-discipline within creativity - as
I have almost none. My only job in the past couple of years has been to edit
the books I listed above. But instead I can't turn off my gushing tap for
producing new stuff (blogs, essays, contributions to debates, fresh projects,
you name it) - which means I'm in danger of always having astronomically more
to do than I ever get done. It often feels like trying to mop up the water from
the kitchen floor after a pipe has burst. Someone needs to temporarily turn me
off at the mains.

What should help is that I
now work a compressed fortnight, which means I have every other Monday off. I've
decided to guard that time in order to focus on my projects, and hopefully make
better progress in the coming year. Additionally, I am going to be better at
writing targets for myself, as a better way of putting tangible goals on paper
and measuring progress more rigorously.

Monday, 14 May 2018

One of the peculiar things
about the current political and economic landscape is politicians'
preoccupation with the UK
manufacturing industry, and how important it apparently is to reconstitute some
of our past manufacturing glories. It's true we once had past dominance in the
manufacturing industries (along with about a dozen other leading countries),
but just because people of past generations have been accustomed to something
doesn't mean things should always stay the same.

When making things was the
primary way to earn a living, and physical labour and extracting raw materials
provided the substrate for big business, it was understandable that people were
emotionally wedded to Britain's
place in the global manufacturing industry. For most, their living depended on
it. But the world has changed a lot.

Nowadays other nations have both the
absolute and comparative advantage in manufacturing goods, and we have both the
absolute and comparative advantage in providing services. IT, design,
marketing, consultation, financial, legal, real estate, health care and
advertising are huge industrial job creators, as are restaurants, hotels, bars
and holiday services. These are based more on technical and financial
assistance, leisure, entertainment, health and well-being than on physical
labour and making things with raw materials.

Manufacturing
things simply isn’t the source of high value, high wages or big profits like it
was in the past. In fact, the UK
is made better off when we have a manufacturing trade deficit with countries
than can produce goods cheaper and more efficiently than we can.

Not only is it
an oddity how politicians hanker for manufacturing, and galvanise people into
believing that that is what they should be shouting for; it is equally odd how
so many people don't understand that when other countries have the manufacturing
advantage over us in terms of cheapness, quality and efficiency, it is a good
thing that we buy our stuff from them, and not produce it ourselves.

Wednesday, 4 April 2018

In
recent years, many politicians and social commentators have bemoaned zero hour
contracts, believing them to be a scourge on society, and calling for them to
be outlawed. Outlawing zero hour contracts because a minority of people would prefer
securer employment is about as dim-witted as outlawing night shifts because the
majority of people prefer to work in the daytime.

The
main question these politicians and social commentators never consider asking
is why they think they know the zero hours contract situation better than the
agents in question – where by ‘agents in question’ I mean the entirety of
society’s revealed preferences.

There
are primarily three groups in the zero hours contract situation:

1)
Employers for whom zero hour contracts are a benefit

2)
Employees for whom zero hour contracts are a benefit

3)
Employees for whom zero hour contracts are not a benefit

The
reason there is not a fourth group - Employers for whom zero hour contracts are
not a benefit – is because such a group would not offer zero hour contracts in
the first place if they conferred no benefits on the firm.

Last
I heard, out of the 3 groups, groups 1 and 2 make up a huge majority – that is,
most people (employers and employees) involved in a zero hour contract
agreement find it beneficial. So effectively what our illiberal foes above wish
to do is outlaw something that a majority find beneficial for the appeasement
of a minority who simply prefer to have more regular and stable contracts.

I
won't get into what should be the obvious reasons why even a total ban on zero
hour contracts won't make current unstable contracts more stable; nor will I
get into why such a completely unnecessary and oppressive law would cause harm
to groups 1 and 2 by prohibiting a mutually beneficial relationship to which
they are both tacit signatories.

But
what I will say is - it should be evident that there are plenty of reasons why people
might be on zero hour contracts, yet simultaneously no reason to ban them. It’s
one of the biggest mistakes people make, acting to represent a small group
without understanding all the conditions under which those outcomes came about.

For the vast majority, the labour market of
supply and demand involves a mutual allocation of resources (work and wages)
far beyond the scope of any top-down management, and with far more efficiency
than arbitrarily introduced state-meddling can achieve. Telling employers they
must offer a regular contact based on the whim of political ideologues can only
harm the qualities of mutually allocated resources.

Here's what's being missed with alarming
short-sightedness. Yes, some people struggle on zero hours - the part of the
labour market that contains much of this kind of work is often insecure,
unstable and volatile anyway - but the notion that outlawing it will make
things better is moonshine.

Here's the key point. The labour market of
supply and demand is dictated by the numerous price signals that generate all
kinds of information about the value of labour, the supply of services, length
of contracts, and so forth. A dentist can work in the same place for 15 years
doing a similar number of hours each day. A sub-contracted painter and
decorator can work at dozens of places in that time, with varying lengths of
contract. Selling labour is not homogenous, it is heterogeneous - and you're
just not going to be able enforce better pay or more stability without damaging
a whole sub-section of people in that labour market.

It's common to think of zero hour contracts only
in terms of employees, and to imagine most employers to be cold, uncaring
exploiters. But it distorts the true reality. Economic policies affect
employers as well as employees - and employers are the essential providers in this
equation. Make a law that helps low earners and you hinder another group
(usually low-skilled employers but also other low earners). Make a law that
helps tenants and you hurt another group (usually landlords). Make a law that
purports to help a minority on zero hour contracts and you hurt pretty much
everyone else, while probably robbing many others of casual work.

Employers have lots to consider when they take
on people. They have to make forecasts about the future; they have to consider
market fluctuations; they have to consider what they should invest; and they
have to consider which future state-interference will hamstring them. Zero hour
contracts are sometimes opportunities to exploit, but they are mostly
opportunities to reduce risk in a frequently unstable market, and create lots of
short-term employment that most employees value.

Think who the beneficiaries of zero hour
contracts might be - students, single parents, those looking for additional
employment to top up their main job, and those with multiple part time jobs.
The ability to work flexibly as and when they want is a very beneficial thing
for them. Those who look to ruin theirs and their employers' flexibility are
narrow and myopic.

Economic growth and competition are the main
vehicles that will reduce zero hour contracts for those not happy with them.
The reason being, job growth increases the necessity for employee stability,
which will only diminish the allure of zero hour contracts for both employers
and employees, because employers are going to want stability in their
personnel.

Moreover, as unemployment rates fall and job
creation continues to take place, greater power is transferred to jobseekers,
which places selection pressure on firms offering less-desirable contracts. Ironically, proposals to ban zero hour contracts,
or impose arbitrary restrictions that have been plucked out of the air, will
uproot some of the stability in the market, which will more than likely go on to
have a cobra effect type scenario - the very opposite
of what we are told they are trying to do.

Thursday, 29 March 2018

Owen Jones' latest gripe
about the outrageous injustice of Britain’s wealth inequality is that
our MPs, even Labour ones, are lacking the ambition to tackle it to his
satisfaction. He thinks that because the rich have a lot more than the
poor, this makes this economy 'dysfunctional and rotten', and he is calling for
almost all transfers of funds (inheritance, gifts, capital gains) to be treated
as money in waiting for the government.

What Owen Jones has never
been very good at is understanding causality in these kinds of situation.
Rather like how feminist proponents of the spurious gender pay gap don't grasp
that when left to their free choices, there will be unequal outcomes as regards
men and women's average pay because men and women want and prioritise different
things, radical redistributionists rarely seem to grasp that when the results
of societal free choices are measured - even in the most equal countries - the
lowest two quintiles own next to nothing compared to those in the top quintile.

Alas, Owen Jones is not
alone though - errors of causality are highly common. This is because when we
ascribe causes to effects we do so by focusing on what seems to be the most
primary element of causality at the time. So for example, people will assert
that ISIS was caused by (among other things) Blair and Bush's Iraq invasion;
that the financial crash of 2008 was caused by (among other things) bankers'
recklessness; that the Brexit majority vote was caused by (among other things)
a huge anti-immigrant feeling; and that the Trump election was caused by (among
other things) a large anti-establishment feeling.

But consider a heart
attack by way of an analogy. Your obese neighbour Bob is outside washing his
car on a hot July afternoon, when suddenly he keels over and dies of a heart
attack. The most primary element of that event, the one on which the local
newspaper report would probably focus, would be on the fact that Bob was an
obese man over-exerting himself on a boiling hot summer day.

But there are other causes
too, multiple causes. For example, Bob's obesity was in part caused by
genetics, but also by his eating and drinking habits. Bob drank 40 units of
alcohol a week and had a fry-up for breakfast three or four times a week. He
also suffered from depression, which drove his excessive drinking. His
depression was triggered by multiple past legacies, including being treated
badly by his father, and having a mother too scared to protect him.

The upshot of all this is
that causes are numerous and complex, and they depend very much on which link
on the causal chain is being zoomed in on at the time. Moreover, in the case of
Bob's heart attack, all of the causes have some relevance and none of them
contradict the others.

The things that are causing
all this inequality of outcome are very much not instances of unfairness, they
are, by and large, instances of freedom in action, where a society with billions
of individual decisions, in aggregation, naturally leads to expected power laws
and income disparities. It's all very much to be expected, and probably always will be - it's a natural outcome of societies with diversity and a multitude of options.

Wednesday, 21 March 2018

"How does climate change politics qualify as one
of your scams? I hope you're not denying that capitalist industry has greatly
affected our planet, and that political steps to combat it are making polluters
culpable for their actions."

I've explained the faulty
thinking at length before with a whole
series of blogs - but the best way to define it as a scam is to elicit a
popular term coined by Bruce Yandle called Bootleggers and Baptists, which is
about regulations that provide self-interested benefits for both the regulators
and for those thought to be victims of the regulations. It is based on the notion
that Baptists support Sunday closing hours, but so do Bootleggers, because if
local bars and off-licenses are closed, Bootleggers gain too. Sunday closing
hours benefit both Bootleggers and Baptists, while at the same time purporting
to serve the public interests - and the green regulations are of a similar
nature, as well as being very
short-sighted and hugely
damaging. Climate change alarmists
naturally support heavy green regulations - because it furthers their own agenda,
and enables them to cream off crony capitalist subsidies - but so do some of the
biggest polluters too because some of the regulations help shut out
competition.

As well as the inherent
crony capitalist misallocation of resources, the other part of the scam - believed quite ubiquitously, I'm sorry to say - is that this is all very necessary as a regulatory
means of reducing emissions down to a state-mandated nominal level. But
frankly, this perceived is a rather confused one. As I've
said before:

"A carbon tax is not a means of reducing
emissions down to a nominal figure; it is supposed to be a tool for maximising
utility. That is, carbon taxes help us incorporate negative externalities into
the price system of a free market whereby polluters carry the costs of their
negative externalities, but also whereby the price reaches equilibrium as the
costs of pollution are measured accurately against the benefits.

That way, those negative externalities are compensated
for by the fact that they increase utility to a level greater than their costs.
For example, a timber factory and a roadside diner on the outskirts of a city
add some pollution to the environment, but they make up for those negative
externalities by providing goods and services that people want.

Where they are a benefit is when carbon taxes
intervene in the price system to ensure that future costs of transactions are
thought to be worth paying for present benefits. The rate of carbon tax is
roughly commensurate with the future cost of pollution, incorporated into the
price system to justify the benefits now – it is a tax that attempts to
ascertain the benefits of pollution. Carbon taxes are far from simply being
about lowering emissions, although as I argue here, they will likely change
future behaviour as businesses innovate to be greener with improved technology."

Friday, 16 March 2018

This week Stephen Hawking
passed away at the age of 76. Hawking was certainly one of the world's
brightest minds in physics - but it's quite apparent that he was susceptible to
much mental mediocrity too. So much so that he very publically fell for each
one of the 3 biggest scams humanity has ever created. They are:

Regular readers will be
familiar with my antidotes to these scams, so in this post I want to touch on
something a bit more specific: how people with highly intelligent minds can be
great in some areas and yet so woefully inadequate in others. Perhaps the biggest
human failing when it comes to cognition is failing to observe Pascal's piece of wisdom:

"A man does not prove his greatness by standing
at an extremity, but by touching both extremities at once and filling all that
lies between them."

For me, this
is one of the best summaries of how to approach mental excellence - understand
each extreme but at the same time occupy enough of the ground between in order
to retain a balanced view where you've fully captured both sides of the
argument. It takes a certain skill to harvest the uncertainties in the world
while at the same time collating a succession of views and observations that
you feel will still be the case for the rest of your living days. For this we
shall turn towards Isaiah Berlin.

Isaiah Berlin once wrote an
essay called "The Hedgehog and the Fox", which is based on a fairly
well known parable from the Greek poet Archilochus - "The fox knows many
things, but the hedgehog knows one big thing". The observation is that the
fox has cunningness, fleetness of foot, and the crafty ability to plan its
course of attack. The fox does many things really well. The hedgehog, on the
other hand, is slower and behaviourally less complex - but he has one big thing
to outwit the fox; he can roll into a ball, show his spiky defences and render
the fox's crafty planning ineffectual. The hedgehog does one thing really well.

In the essay,
Isaiah Berlin
wants to define the various thinkers in philosophy and literature into two
groups - the hedgehogs and the foxes. The hedgehogs view the world through the
lens of a single defining narrative around which all other ideas revolve. Those
single defining narratives can be theistic or atheistic convictions, political
ideologies, liberalism, and things of that kind.

The foxes view
the world as a more complex, scattered, intractable and open-ended narrative;
with all ideas feeding into a system that leaves questions unanswered, that has
subjective expressions appreciated, and that has multiplicity of subsidiary ideas
instead of a single defining narrative. If Pascal's observation about 'filling
all that lies between' can help us become excellent, then understanding how the
fox and hedgehog mentality can be applied will also be of great use.

Now the
Hedgehog and Fox illustration is not perfect (see appendix* below) But it does
provide a pretty good signpost to a potentially rewarding treasure chest
concerning the pursuit of mental excellence. For I believe that if one is to
become master of one’s own reasoning, and find the key to enhanced understanding
of reality through the various lenses, then one must seek and find expertise in
both kinds of thinking. That is to say, the true genius, if he or she is to
reach the highest mental attainment, must be a master fox and a master
hedgehog. He must do both things well if he is to 'fill all that lies
between'.

He will need to
develop the ability to view the world through the lens of a single defining
narrative around which all other ideas revolve. That narrative does not have to
be one singular driving force at the exclusion of all the rest – it can be a
synthesis of singular ideas in conglomerate form – but the most important thing is
that it contains the blueprint to produce a framework of the narrative in
simple terms, consistent with how reality is.

He will also
need to develop the ability to view the world through the lens of a more
complex, scattered, intractable and open-ended narrative, with the multiplicity
of subsidiary ideas complementing his singular framework of simplicity. As a
consequence, reality for him will be seen in the right way, as being amenable
to lots of statements that convey truths about nature and the concomitant human
ideas, and how they can be assembled into some fundamental truths that form a
singular narrative.

And also it
will be seen as being at the same time complex, incomplete, intractable, highly
subjective, and equivocally open to interpretation and speculation as the story
unfolds and at times remains beyond our scope. Embracing a reality that is a
synthesis of these two things is the first step to the highest mental
attainment

Two thinkers I
admire greatly – William Blake and Soren Kierkegaard – produced works that
wonderfully exemplify the kind of thing I mean when I talk of mastering the
hedgehog style of thinking. They each had an individual worldview that tended
towards love, grace, mercy, forgiveness, the transcendent, and the metaphysical
through the singular excellence of mind and imagination, but in a way that puts
the divine at the heart of their narrative. Another thinker I admire greatly is
William Shakespeare – but I part company with Isaiah Berlin, in that I think Shakespeare exhibits
the fox-type of thinking over a rich body of work.

Like Blake and
Kierkegaard, Shakespeare constructed a worldview that explored deeply the
subjects of love, grace, mercy, justice, forgiveness, the transcendent, and the
metaphysical through the singular excellence of mind and imagination, but he is
not easily pinned down to a hedgehog-type discipline, or singular narrative.

His
exploration came more from the measure of man and the human ability to use the
mind to piece together scattered fragments of ideas and experiences in spite of
a fairly open and inclusive narrative. His pain at the uncertainties revealed
through the exploration moved him to confront those fragments through the
excellence of mind and imagination, which makes him hard to pin down as a
hedgehog.

How you attain
your own mental excellence will vary from individual to individual – but as I've
said before,
if humans work hard to pursue it with honesty and integrity, we should in
theory pretty much agree on most things factual.

One of the key
skills in conflating the hedgehog and fox mentality is about mentally arranging
a lot of diverse data into succinct concepts, while at the same time
understanding the complexity that underlies them. For example, the theory of
evolution can be succinctly expressed well in a single essay, but it captures a
lengthy and intractable timescale that includes fossil records, natural
selection, genetic analysis, comparative morphology and the forming of nested
hierarchies through illustrations like a phylogenic tree.

Whether
it is Charles Darwin on evolution, Adam Smith on market economies, John Milton
on free expression, Albert Einstein on relativity, Thomas Kuhn on the nature of
the paradigm, Gilles Deleuze and Félix Guattari on the natures of rhizomatic
theory, or anything that makes up a succinct summary of complex data, the
important thing is that one has a method of developing life goals and wisdom on
the singular narrative, but at the same time work hard to refine the complexity
of data into more tractable and manageable heuristics. Whether you are in
business, psychology, science, politics or the teaching industry, and even if
your principal interests are philosophical, theological and literary, you are
not going to have a competent worldview if you veer too far into one
extreme.

If
you are too much of a fox without recourse to hedgehog considerations, your
worldview will lack that structured framework that locks your diverse thinking
together into a singular narrative. But equally, if you are too much of a
hedgehog without recourse to fox considerations, your worldview will be too oversimplified,
and too black and white to capture the real diversity of reality, and the kind
of pursuits we need to be making.

Of
course Pascal's wisdom about "touching
both extremes and filling all that lies between” serves to make a good
point even better. Here the two extremes are the fox and hedgehog-type
thinking, and filling all that lies between involves mastering both, and
capturing the vast spectrum that lies between them.

The
fox-type genius has broad vision as he perceives the complex interaction of
seemingly scattered, unrelated and even inconsistent ideas. He will be a master
if he can transcend the limits of the hedgehog and gather a rich nexus of
experiential protocols into a worldview built on mental excellence. The
hedgehog-type genius can compress the data of that broad vision into a woven
fabric of consistently illuminating visions attached to more singular
perspectives. If they
were two people, the hedgehog would need the fox, and the fox would need the
hedgehog. The
really great thinker is the one who becomes both those people simultaneously;
he is someone who masters the fox-mentality with every area the hedgehog could
consider his own speciality. He would understand physics, but also the infelicity of
human scams like the ones above. In Stephen Hawking's case, though, history will forget this, and rightfully
remember him for his tremendous contributions to science, in spite of a debilitating
illness that would have beaten lesser humans.

*Appendix:

The underlying
theme behind Isaiah Berlin's
essay was to place Tolstoy as the greatest writer because he most aptly incorporated
the skills of the Hedgehog and the Fox into his work. Berlin also wanted to show how other distinguished
writers largely fell into one camp or the other:

Now personally
I don't see much merit in demarcating authors in this way - not just because that
selection of people omits a whole canon of thinkers worthy of consideration
over and above some of those writers (although that is an issue), but primarily
because I don't think one can make those kinds of judgements, or that level of
simplistic demarcation, without meeting those writers and thinkers in person and
getting a lot better sense of how they think by spending time with them.

In other words,
an individual’s writing tends to reveal only a limited sample of the full diversity
of that individual’s thinking - and such sparse sampling from people like
Isaiah Berlin, born after they have died, doesn't capture anything like enough of
the essence of the writers in totality.

I think that’s
the big thing that virtually every classifier misses, and something you'll do
well to remember - the majority of minds are too diffuse to be easily categorised.
They are a morass of hedgehog and fox-type mentality - a bundle of impressions
that give the feeling of being some way between complete and incomplete.

Saturday, 10 March 2018

Sometimes I can't believe what I read: this time about government ministers wanting to regulate how long children spend on the Internet. It is not politicians' job to run the country in loco parentis - so even if it is the case that children are spending too much time on the Internet, this area is one for the parents to regulate, and parents only, not the state. But illiberal nannifying aside, I'm not even sure that this is much of a concern in the first place - in fact, the intention may be rather misplaced.As it happens, I saw one or two pictures doing
the rounds in recent weeks, lamenting the fact that kids have forgotten how to
go out and play because they are over-consumed by attention to digital devices.
I've no doubt there are conditions under which that's true, but I think the narrative that kids are missing out
on playing in the woods because of their iPads may be mistaken.

When I was a boy I played
out with friends; on the swings and slides; on skateboards, on bikes, even at being ninjas. If
I'd grown up with an iPad, and the entire world's knowledge readily
available at the touch of a button, the outdoor activities probably would have
been less alluring to me.

Don't get me wrong, it can
be fun playing outside when you're young - and no child ought to be at a computer
for too many hours a day. But I think it is a misjudgement to assume kids are
missing out on enjoyment because they are indoors on digital devices rather
than outside playing netball or climbing trees.

And surely, if children found
more enjoyment playing outside than on their digital devices, they would spend
more time outside. Maybe when we were kids we played outside because that's the best we had - and maybe now there are more options, the outside playing time
doesn't satisfy quite so much when compared with the alternatives.

It's equally likely to be
true that as material progression occurs, attitudes change relative to
expectations. A Christmas stocking filled with 1970s presents would disappoint a
contemporary child to about the same extent that it would elate a 1940s child. Older
people still find satisfaction in listening to the radio and watching scheduled
TV programmes with adverts. Younger people have been accustomed to instant downloads
whenever they want something.

I like television; I like
films; I like reading books; and I like going out - but I find my juices run
out on those things quicker than they run out on being on my computer, with its
heady mix of writing, debating, surfing and entertainment - and that is
probably true for many younger people too. They don't do many of the things their
parents did, because they don't have to. And in all likelihood, their children
and grandchildren will have ways of entertaining themselves that will make today's
iPads and gaming consoles seem quite prosaic in comparison.

Thursday, 8 March 2018

I've not held back on my
criticisms of Labour's madness over the years - but this latest bout of
intellectual and empirical insanity truly has to the worst idea they've ever had
the gall to float in the public domain. In fact, in terms of political policy, I'm
going out on a limb in saying that, from memory, it is probably the worst idea
I've ever heard from politicians - equivalent of wanting to fine unicorns for
stealing flowers from the bottom of the garden.

The latest hair-brained
idea from Labour is to punish firms for not closing gender pay gaps. Apparently,
under a Labour government, and driven by shadow equalities buffoon Dawn Butler,
firms will have to prove they are taking action to close the pay gap or face a
fine.

They will need lots of
luck finding such a thing, because if reality ever does kick in they will discover that there is no gender pay gap. It is illegal to
pay women less than men for doing the same job. The Equal Pay Act of 1970, the
Sex Discrimination Act of 1975, and then later the further codified Equality
Act of 2010 all protect workers from unfair discrimination if their remits are
the same.

What does exist is an
earnings gap - which is a statistical weighted average based on the life
choices men and women make, and the numerous things that comprise the
differences in terms of personalities, aspirations, wants and life choices. An
earnings gap is precisely what you'd expect to see when men and women are free
to make decisions that suit themselves and their families.

So this is both a
non-existent problem, and worse, a non-existent problem that even if it were a
problem would not be the fault of employers, much less something for which they
should be penalised. In what is turning into a
very long list, this is surely the very worst example of half-witted politicians
misdiagnosing a problem, and then positing a truly illiberal, wholly asinine
solution to it.

Wednesday, 7 March 2018

Young people without family
wealth are "right to be angry" at not being able to buy a home, says Theresa May. She
is right, but alas, she neglects to tell the whole story - the part where
successive governments, including hers, have played a huge
part in this problem is the real reason prospective home owners should be
angry.

Suppose you actually want
to help the buyers of a specific product like housing - the last thing you
should do is help make it a sellers' market. A sellers’ market is an economic
situation that hands advantages to sellers over buyers, and this is the society
to which young people have been accustomed.

House owners hope the
housing market will be a sellers’ market when the time comes to sell their
house, and house buyers hope the housing market will be a buyers' market when
they are ready to get on the property ladder.

Governments who advocate strict
planning regulations in effect support the state-mandated creation of a sellers'
market, while at the same time they kick many prospective buyers' feet away
from the first rung of the property ladder.

Basic economics should
inform our politicians that if demand is high but supply is restricted, then prices
will rise, making housing unaffordable for more people. So long as politicians do
not interfere with prices, they will tend to adjust so that the quantities
demanded and quantities supplied are more or less in equilibrium.

Theresa May is not stupid
- she is expressing phoney outrage while keeping quiet about the fact that bargaining
inequalities in the housing marketplace are creating a shortage. Currently the
amount of housing demanded by buyers is greater than the amount supplied by providers;
and prices will fall only when restrictions are relaxed so that the amount
demanded by buyers is equal to or less than the amount supplied by sellers - when
there is more of a buyers' market and less of a sellers' market.

The only thing that might provide
a little medicine to people's frustration is the laughter they can express when
they see the recent appearance of Green Party leader Caroline Lucas on Channel4 News, stating what a bad job the government is doing on the affordability of
housing problem. The Green Party no less - which is rather like the Chief
Executive of McDonald's appearing on television saying what a bad job Subway is
doing on tackling teenage obesity.

Sunday, 4 March 2018

"If
you don't pay tax you end up in prison. Therefore is tax theft, or is it the
price we pay for a civilised society? If it's the price we pay for a civilised
society, then it's not one we ever had a say in. Therefore it's a kind of
theft, but one we appear to allow to happen to us?"

The best way to answer
questions like this, I find, is to reverse the method of questioning somewhat.
In asking whether tax is theft, or synonymous with theft, we are actually looking
at the properties of something definitely bad and asking whether the other
thing shares some or all those properties.

On top of that, when we
consider what is wrong with something, and enquire as to whether the other
thing is comparable in terms of wrongness, it is often useful to compare its
fundamental principles to other things in society. I will do both those things
in this blog post.

The second one first. If at school you deliberately
break little Johnny's mum's window, your parents should compensate them. If you
break someone's window as an adult, you should compensate them. This has an
analogue with some of the negative externality taxes like pollution.

On the other hand, if the
local gangster goes round small businesses and obtains money through a
protection racket, or if poor Tom takes some of rich Jack's lunch money in the
school playground, this doesn't seem so good, even though it is tenuously
analogous to how the state treats its citizens.

Apart from in spirit, the local gangster forcing restaurant owners to fund his own lifestyle is not hugely different
to how the state forces me through taxation to invest in services I seldom or
never use and policies to which I am wholly opposed.

To that end, I'm afraid the
properties of taxation do all too often share some of the fundamental
properties of theft. If Jack steals Jill's laptop, then Jill is the victim to
about the same extent that Jack is a beneficiary. But the wrongness of theft is
the moral wrongness that harms society, plus all the other negative spillover effects
that I'll come to in a moment.

The wrongness of taxation
is that it forces consumers to spend our money on things like establishment
pay, layers of bureaucracy, small business subsidies, bailouts and
transportation projects that we otherwise would not. To that end, a lot of
taxation is a little like theft in terms of the consequences to the consumer,
but it more closely resembles a protection
racket (but not wholly, as we'll see in a minute).

The other thing that tax
and theft have in common is that they both impose value-robbing opportunity
costs on society. When Jack designs a mousetrap, or provides a taxi service, or
cooks pizzas, he adds value to society. When he steals Jill's laptop, he inflicts
all the costs on society that crime imposes, but he also forgoes the opportunity
to do something productive.

Taxation has similar opportunity
costs. While taxation transfers funds from one place to another, and in a
costly way, it doesn't produce very much. There is a small sense in which
taxation sustains parts of society (defence, rule of law, and other public
goods) that enables others to produce, but there are enormous opportunity costs
to taxation that misallocate resources by being out of kilter with supply and
demand, and as a consequence rob society of a lot of value.

Taxation and theft also
rob society of value by diminishing the number of mutually beneficial transactions
that occur, because they both increase the cost of trade, and therefore
increase the prices that businesses have to charge. The opportunity costs of
taxation and theft are the aggregation of all the forgone opportunities for
trade - the mousetraps that don't get made, the taxi rides that never happen,
and the pizzas that never get cooked.

Some people struggle with
this notion, but it's easy to see its truth by imagining a more extreme
example: a country ruled by a greedy dictator who taxes the life out his citizens
and allows lawlessness to occur. The costs to the citizens are not just the taxes
and the crime - the more acute costs are all the lost productivity and prospective
innovations that never materialise because of the taxes and lawlessness.

In summary, then, taxation
and theft share many of the same properties - but theft is a bit worse because
theft always engenders net costs on society, whereas tax mostly does, but not
in every instance.

Every instance where tax
goes towards providing something that could, and should, be provided privately,
taxation has similar properties to theft. Every instance where tax goes towards
providing something, like a public good (defence, rule of law) that is more
valuable to society than the cost of the tax gathered, taxation is a lot less
like theft - it is more like a compulsory insurance policy that provides
societal benefits that would otherwise be more difficult to obtain because of
the free
rider problem.

Tuesday, 27 February 2018

Sometimes an argument
you've been making for years deserves a rerun when something so ludicrous
happens that could make even the most ardent sceptics stop and think "Hmmm…
he may have been onto something all along".

This, and many other
things the BBC does, is not something on which the vast majority of people
would voluntarily spend their money - but they are forced to do so because if
they do not they face prosecution. This is no longer the way to run a service
that ought to stand or fall on commercial demand, not on enforced confiscation. When
taxpayers are faced with a £15 million bill to spruce up a television set with
a mosque for its Muslim characters, you know there is something seriously wrong.

I have no interest in
soaps, but I know many people do. Fine, then let them vote with their wallets
and purses, not with a television tax. In this day and age, where digital
television and voluntary subscriptions increase the width and breadth of
television entertainment available, and improve quality by added creative
competition, the BBC's licence fee system is anachronistic and inefficient.

There is a lot I like about
the BBC - and the chances are, if it were to be offered on a voluntary subscription
basis, like Netflix, Amazon Prime or a Sky package, I probably would pay the subscription
costs. But for those for whom that arrangement would not constitute net value,
they'd be free to spend their money elsewhere.

If viewers really do value
what the BBC provides, then the BBC would continue to attract customers under a
more competitive subscription system. But trying to justify a licence fee tax
on the basis that there may not be healthy commercial demand for the programs
and services if people were free to opt out, is no basis for retention of this
arrangement.

Because one thing is
fairly certain - if there was no such thing as the BBC, there is absolutely no
chance that the vast majority of the public would want it invented in its
current format. It is only because the BBC has been with us for so long that so
few people seek to question its edifice. It needs reforming; the mandatory
licence fee needs to be discontinued - and in its place a pricing model that stands or falls on the basis of commercial demand.

About Me

This is the Blog of James Knight - a keen philosophical commentator on many subjects.
My primary areas of interest are: philosophy, economics, politics, mathematics, physics, biology, chemistry, theology, psychology, history, the arts and social commentary.
I also contribute articles to the Adam Smith Institute and the Institute of Economics Affairs.
Hope you enjoy this blog! Always happy to hear from old friends and new!
Email:j.knight423@btinternet.com